The Monetary Policy Committee of the Reserve Bank has been meeting Wednesday the 12th of August and today the Thursday the 13th. Including this one there are only three more meetings of the MPC before Tito Mboweni moves on. As always there is speculation regarding what the decision of the MPC will be. Most commentators seem to expect no cut, although there have been some rather loud calls for cuts and large ones at that. The decision will be live on webcast at 3 pm. So what are the chances?
- Most economists say no cut
- Twittersphere says no
- Mboweni may want a swan song
So although the prospects don't seem very good and even though major decisions like this should be based on hard facts often sentiments seeps into the decision, after all the invisible hand is often the sentiment and emotion of the market rather than some abstract mechanism. It is the feeling and intuitions of actual people in the market which sways their economic decisions. The data may be looking slightly better on the inflation front, but other figures show that the economy is still in decline so there are arguments both for and against a cut.
Tito Mboweni is on his way out and may want to get a bit of feelgood back from the market before he goes. Then again he is on record as saying the Governor of the Reserve bank is not a position to be based on popularity. However his past form shows that he does like to spring the odd surprise. Justmoney asked the Twittersphere what they thought and most said no change, and that The Guv will wait for the effects of previous cuts to filter through. There was even one call for an increase given that there may be further turmoil to come in international markets which could still wash over us here. Watch it live on webcast at 3 pm.